EU disputes S&P rating cut

Credit agency cut its long-term rating of the European Union by one notch to AA+.

The European Commission said Friday that Standard & Poor’s was wrong to cut the European Union’s credit rating to AA+ from AAA since the 28 member states’ commitment to running a balanced EU budget was underpinned by treaty, reports. S&P downgraded the EU for the first time, citing rising tensions on budget negotiations. The move follows cuts to the sovereign ratings of member states in recent months.
European officials said they were not surprised by the move since S&P recently downgraded the Netherlands. It has also lowered its view on six other member states – France, Italy, Spain, Malta, Slovenia and Cyprus – in the past year. But they pointed out that the EU has no debt or deficit to speak of and its budget is a stand-alone entity financed by 28 countries, making it one of the most stable institutions and most reliable borrowers in the world. “We must put it in perspective,” Belgian Prime Minister Elio di Rupo said as he arrived for an EU summit in Brussels. “It’s just an opinion,” informs.

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